Flacoduro1 wrote:
The Villalobos Brothers Scam happened in a place where many expatriates looked for good investments in Costa Rica. They used the trust of these communities to their advantage. Over 6,300 people were tricked into giving them money, promising a 36% return on loans they called personal investments.
This promise drew in U.S. and Canadian retirees who put all their savings into it. They thought it was a real investment.
Background Information
When the Villalobos Brothers Scam started, many expatriates were feeling hopeful about the economy. People put all their savings into it, with one person investing $80,000. At first, they got their money back, making them feel safe.
This was like a Ponzi scheme, where new money paid off old investors. It looked like a real investment, but it was actually a big scam.
The scam pretended to be personal loans and made about $1 billion. They gave out cash with 3% interest each month, making investors want more. People invested from $10,000 to $7 million, thinking it was safe.
Even when warnings grew, many still trusted the Villalobos brothers. But when they stopped paying on October 14, investors were left with nothing.
The brothers aimed at North American expats in Costa Rica, who were looking for big profits. They had steady money and liked taking risks for big gains. The promise of high returns and good marketing tricks fooled them.
This helped the Villalobos brothers keep and expand their scheme over time.
The Mechanism of Payouts
The way they paid out money made things even more complicated. They sent out checks with rules that stopped people from cashing them right away. This made it seem like everything was stable, letting the brothers control the money flow. Some investors got their money, but many didn’t, making the scam even more deceitful.
When the scheme fell apart, it showed just how risky it was. Investors were left with the harsh truth: they had lost their money.
In July 2002, the government stepped in due to growing pressure. They launched an investigation into the Villalobos brothers. This led to their bank accounts being frozen, making it hard for them to do business. The main reason was concerns about money laundering linked to their finances.
Freezing of Bank Accounts
The decision to freeze the Villalobos brothers’ bank accounts was a key moment. It stopped their money flow and warned the public about the serious allegations against them. The action was taken because of evidence showing their funds were tied to illegal activities.
This move showed the Costa Rican authorities’ strong stance against financial wrongdoing
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I could add some details of my experiences with some of my friends who lived there , but long have since passed away. I believe Garfield" the fake war hero was the one of the biggest investors.
I think it was the second time down sitting at SL bar I mentioned buying property out loud and it was like broadcasting for flies to shit. An old timer named Alberto knew a guy and I swear I heard from at least four others over the next few days ready to show me around.
I looked at property but realized there isn't such thing as a realtor in CR. At least there wasn't. My pops made sure I have a strong bs detector and man I heard some things from those strangers. Came to realize as with everything in CR it was better to rent than own.
The further south I went toward Panama the shadier it got. Just my experience but I'd be very wary of doing any kind of substantial business with anyone lurking around Chepe and those expat haunts. There be pirates matey.
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